OK - here is a case for actually sitting down, with a cup of black coffee and reading the entire preliminary report you receive from title companies!
I recently represented a Buyer that purchased a home from a Seller who, by all accounts, appeared to own the home -- he lived there, he was behind a few HOA payments but agreed to take care of that; he made all the repairs we asked for, the house was well-cared for, and he signed all docs indicating - he was the owner.
About 27 days into our 29 day COE - I receive a frantic call from the listing agent. I think these were her exact words,
"Did you see that this house is up for auction tomorrow?"
Yep. And NO! - I did not! And why didn't I? Because I did not thoroughly read the entire prelim report! And I figured the listing agent would have done her homework -- BEFORE she listed the house - making full disclosures! (Another post - another time!)
Back to the prelim -- we were scheduled to close on August 29, 2008. Date of auction: August 28, 2008. Here is a copy of the prelim - Page 4, Schedule B Requirements - Section I: (names and addresses removed to protect the innocent!)
I read this page about 50 times at that point.
The next time I get a prelim packet (and sometimes they are gigantic!) and "sigh"- I will take the time to read it - from Page 1 to 500! This was a good reminder for me to put extra, extra effort toward "being doubly certain" that my clients are being protected and diligently represented. In these times of short sales, foreclosures, etc., we can't assume that the Seller is disclosing everything - nor can we assume that the listing agent was equally as careful as I should have been.
PS - With an enormous amount of effort from all parties involved and a COE extension - the home sold!